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Accouting - Volume Variance
Original budget for 2009 included $600,000 fixed overhead and $400,000 variable overhead. Labor hours were estimated at 200,000 labor hours. The predetermined overhead rate was $5 per hour.
Actual overhead turned out to be $1,100,000. Actual labor hours were 220,000 which exceeded the standard hours of 210,000 for that volumen activity. What is the volume variance for overhead? Volume Variance = Fixed Overhead Budget x Fixed Overhead Applied Volume Variance = Fixed OH Budget x (Standard Hrs Allowed x Predetermined Fixed OH Rate) Volume Variance = Fixed OH Budget x Standard Hrs Allowed x Budgeted Fixed OH Variable Planned Mthly Hrs Volume Variance = Fixed Overhead Budget x 210,000 x $600,000 2 per labor hour Volume Variance = $600,000 x 210,000 x $300,000 = $1,020,000 What am I doing wrong? |
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